Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)

The Finance Bill implements what can only be described as one of the most disastrous budgets ever imposed on the Irish people. It seems that as the Taoiseach and his Ministers were returning from their summer holidays they witnessed with growing panic the major recession facing the economy. The fundamentally flawed economic decisions of the past decade were clearly coming back to haunt them. The chickens were coming home to roost. It would appear that since 14 October, the Taoiseach and his Ministers have been running around like headless chickens.

Their panic and first reaction was to bring forward the budget to 14 October. It was a rushed job and like all rushed jobs, it quickly fell apart. Within days, decisions like the axing of the automatic medical card entitlement for over-70s were altered but not withdrawn. We had the unprecedented sight of Cabinet Ministers and backbenchers apologising to the public for decisions they had stood and applauded in this Chamber but days before. The savage budget announced on 14 October remains a savage budget and its worst effects have yet to be felt. An ill-considered budget has been followed by further ill-considered measures in this Finance Bill.

Low income families are being hit with the 1% levy on all incomes above €18,305. That figure is far too low and we in Sinn Féin have called for the 1% levy to be applied to incomes in excess of €38,000, more than double what is being exacted here by Government. We called for the threshold for the 3% levy — which we welcome — to be lowered to income in excess of €200,100. It is not a case of not pointing out how it can be acquired, how it can be done. We have done that very clearly, time and time again, over these past weeks. It is typical of the wrong-headedness of this Government that it refused to introduce such a levy on higher incomes during the Celtic tiger years and to devote the revenues raised to address inequality. Now the Government is doing so out of budgetary necessity while at the same time penalising low income families with a 1% levy.

Low income families are also penalised by the VAT increase to 21.5%. They will be disproportionately affected by the rise in prices. This is another example of the Government's perfect timing. VAT goes up by 0.5% to 21.5% on this side of the Border and is being reduced by 2.5% to 15% in the Six Counties. The VAT gap thus created, along with underlying cross-Border price differences is already having a very damaging effect on the retail sector and employment in the Border counties within this jurisdiction. As usual, this Government has made decisions without giving a thought to the effect on such vulnerable local economies, important integral parts of the overall economy. The Government's failure to harmonise the economy on an all-Ireland basis, is a long term failure with real consequences for real people and it must be addressed.

During Question Time today, the Taoiseach tried to misrepresent the view of Sinn Féin, reiterated throughout the Celtic tiger years, that the Government had made the economy dangerously over-reliant on inflated property prices and depended too much on construction for employment. Despite my protestations, he deliberately misinterpreted this as hostility on our part to the construction industry. It was such utter ballyhoo. He has lost it whenever he resorts to that type of codology.

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